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Stock Market Plunge Underscores Need for Power of Attorney
For most people, the durable power of attorney is the most important estate planning instrument available -- even more useful than a will. The recent stock market collapse is making this especially clear, according to a Dow Jones Newswires column that quotes two ElderLawAnswers member attorneys.
The "Getting Personal" column by Victoria E. Knight begins with the story of an elderly woman who lost half her $6 million in savings. The money was almost entirely tied up in stocks, and after the woman became incapacitated, her relatives found themselves helpless to shift her investments. Although the woman had at one time executed a power of attorney to allow another person to handle her financial matters if she became unable to do so, that person had died and there was no back-up.
The column says the "thorniest question" in executing a power of attorney, which stops many people from moving forward with one, is selecting someone they trust enough to serve as their agent under the power of attorney.
"I would rather a client didn't name anyone if they don't trust the person 100 percent," the column quotes New York ElderLawAnswers member attorney Ronald Fatoullah as saying. As reported earlier by ElderLawAnswers, a recent AARP report notes that adult protective services and criminal justice professionals are seeing "an explosion" of cases where powers of attorney have been misused to exploit the elderly.
In the column, Boston attorney and ElderLawAnswers founder Harry S. Margolis explains that a power of attorney can take effect immediately or can be "springing," meaning it only becomes effective when the subject is incapacitated as defined in the document and this is confirmed by a physician.
The column also discusses issues such as who should retain originals of the power of attorney document and talking with financial institutions about their policies regarding power of attorney forms.
To read the Dow Jones article, click here.
For more on powers of attorney, click here.